AURORA TO RAISE A$120 MILLION TO FUND EAGLE FORD SHALE ACQUISITION
● Underwritten placement to raise approximately A$120 million
● US$120 million Eagle Ford Shale Acquisition fully funded
● Acquisition provides increased working interest in ‘liquids rich’ Sugarkane Field
● Development funding for increased position in place
A$120 million Equity Raising
Aurora Oil & Gas Limited (ASX:AUT) (Aurora) is pleased to announce it has reached agreement
for a A$120 million underwritten equity raising via a two tranche offering of 75.0 million securities
consisting of 68.562 million ordinary shares (Shares) at A$1.60 per Share and 6.438 million special
warrants (Special Warrants) at C$1.60 per Special Warrant to institutional and sophisticated
investors (Underwritten Placement). The Underwritten Placement issue price represents a 9%
discount to the five day volume weighted average price of Shares prior to announcement of the
Acquisition (as defined below).
As previously announced, Aurora has agreed to acquire additional working interests across the
three Areas of Mutual Interest (AMI’s) in which it currently participates (Longhorn, Ipanema and
Sugarloaf) and a fourth adjacent area known as Excelsior (Acquisition) for US$120 million cash.
All four AMI’s are located within the Sugarkane Field, onshore United States, in the liquids rich area
of the Eagle Ford shale trend
Euroz Securities Limited is acting as Lead Manager and Underwriter for A$60 million of the offering,
with TD Securities Inc. and GMP Securities L.P (as Co-Lead Underwriters) together with
FirstEnergy Capital Corp underwriting A$60 million of the offering.
Executive Chairman of Aurora Jon Stewart commented, “We are delighted by the response of
existing and new shareholders, including a number of new international shareholders, to this highly
accretive acquisition which will see Aurora’s net 3P reserves increasing 50% to 84 million barrels of
oil equivalent. I expect this transaction to be a successful one for all shareholders.”
“Combined with existing cash reserves, the Underwritten Placement will provide Aurora with
sufficient funds to close the Acquisition before the end of this calendar year, and around A$90
million to fund a larger development campaign associated with the increased Sugarkane Field
working interests. Aurora remains conservatively funded with significant cash reserves and no debt.
I am appreciative of the very significant efforts of Aurora staff and advisors, the Vendor and their
advisors and our Lead brokers Euroz Securities, TD Securities and GMP Securities for their
considerable contributions to the transaction in a tight timeframe."Sugerkane Field Acquisition
Key aspects of the Acquisition are as follows:
● Acquisition of 3/16ths of an existing joint venture partner’s working interest in three
Sugarkane Field AMIs which Aurora already participates in, plus exposure to an additional
AMI, being Excelsior.
● Aurora acquires an additional 5,100 net acres, increasing its total Sugarkane Field net
acreage by approximately 50% to over 15,600 acres.
● Aurora acquires estimated additional net 3P reserves of 28 mmboe, increasing Aurora’s net
3P reserves by 50% to 84 mmboe.
● The acreage to be acquired is all located within what Aurora considers to be the “sweet
spot” of the Eagle Ford Shale trend.
● All additional acreage operated by Hilcorp Energy Inc.
● The Acquisition involves additional acreage within the Company’s existing area of focus and
represents a low risk acquisition of acres under development.
● The enlarged reserves position offers significant growth potential with the same potential
reserves upside identified by Aurora in its existing interests.
● Aurora will now participate in approximately 60 new wells during calendar year 2011 for a
total of approximately 80 wells across the 4 AMI’s by the end of 2011.
● Settlement of the Acquisition is scheduled to occur before year end.
Underwritten Placement
The Underwritten Placement will be made in two tranches:
● Tranche 1 comprising the placement of 45,250,920 Shares to raise A$72,401,472 and
3,589,080 Special Warrants to raise C$5,742,528 (before costs of issue) to be issued under
the Company’s 15% capacity under Australian Securities Exchange Limited (ASX) Listing
Rule 7.1; and
● Tranche 2 comprising the placement of 23,311,080 Shares to raise A$37,297,728 and
2,848,920 Special Warrants to raise C$4,558,272 (before costs of issue), subject to
shareholder approval at a general meeting to be held on or around Monday, 24 January
2011. Tranche 2 is also conditional upon completion of the Acquisition by 24 January 2011.
The Acquisition is expected to close by 31 December 2010.
The ordinary shares will rank equally with existing fully paid ordinary shares. Each of the Special
Warrants is exercisable at any time to acquire, without additional consideration, one ordinary share
in the capital of the Company which will rank equally with existing ordinary shares.
Following the completion of Tranche 1, the Company intends to file a prospectus in Canada
qualifying the distribution of the ordinary shares issuable upon the exercise of the Special Warrants
not previously converted.
Each Special Warrant converts to one Share on the date that is three Business Days following the
date of issue of the receipt for the final prospectus to qualify the distribution of the Shares
underlying the Special Warrants in Canada; or at any time before that date at the election of the
holder in accordance with the Special Warrant Indenture governing the issuance of the Special
Warrants.Settlement of Tranche 1 of the Underwritten Placement is expected to occur on or around 22
December 2010 and settlement of Tranche 2 is expected to occur on or around 25 January 2011
(subject to shareholder approval and closing of the Acquisition).
Use of Funds
The proceeds from the Underwritten Placement (net of underwriters fees and transaction costs) will
be used:
● to fund the Acquisition;
● to fund the Company’s share of further drilling costs associated with its existing and
expanded position via the Acquisition within the Sugarkane Field; and
● to fund general working capital.
Yours sincerely
AURORA OIL & GAS LIMITED
Jon Stewart
Executive Chairman